Intel Looks to Faster Chips to Cut Costs

Architectural improvements in Pentium III Processor-M chips include more circuits in tighter space

Intel Corp. last week unveiled five mobile processors, marking the beginning of Intels transition to a manufacturing process that will provide faster chips and cut the companys costs per chip.

Intels move to the manufacturing process will result in chips that run 20 percent faster and consume up to 40 percent less energy than those made using the companys previous method, according to Intel.

The mobile offerings, labeled Pentium III Processor-M chips, feature architectural advancements, including 512KB of Level 2 cache memory (twice the size of the previous mobile chips cache memory), data prefetching (formerly found only in Intels desktop chips) and a 133MHz system bus.

Following Intels announcement, several major PC makers, including Compaq Computer Corp., Dell Computer Corp., Hewlett-Packard Co., IBM and Sony Corp. of America, unveiled new notebooks featuring the chips.

One system manager said he is eager to deploy such fast mobile chips as his agency weans some of its employees off desktop PCs.

"I think that there was a mind-set that notebooks just wont do the job," said Sam Avera, technology manager for the state of Washingtons Aging and Adult Services, in Seattle.

With Averas agency now awaiting the arrival of Pentium III 1GHz notebooks from Dell, the manager said he expects agency employees will find them suitable replacements for their desktops.

"People used to say notebooks just didnt work for them," Avera said. "But I think that when they get these things in their hands and try them out, theyre going to be very happy."

The switch by Intel, of Santa Clara, Calif., from a 0.18-micron to a 0.13-micron manufacturing process lets the chip maker pack more circuits and electronic features into a tighter space.

While such a change boosts chip performance, perhaps, more importantly, it dramatically reduces the die size per chip, resulting in significant savings in manufacturing costs.

For example, moving Intels top-of-the-line Pentium 4 to the manufacturing process will result in a chip about half the Pentium 4s current size, essentially enabling Intel to double its output and save money at the same time.

The savings are crucial to Intels strategy as it tries to aggressively push its Pentium 4s into less costly PCs, ranging from $800 and up, in the coming months.

Intel and other high-tech manufacturers are struggling to weather an economic downturn that began last fall. While Intel has expressed optimism that sales will rebound this year, several major PC makers have projected sales will be flat or slightly lower this quarter.